Turkish Lira plunges against dollar, euro

Turkish Lira plunges against dollar, euro

Turkish Lira plunges against dollar, euro

AFP photo

The U.S. dollar reached a historic high of 3.4998 Turkish Liras on Dec. 1 in the afternoon, as the euro rose to 3.7162, again an all-time high.

The Borsa Istanbul also lost some 2 percent.

The lira’s fresh losses came after Prime Minister Binali Yıldırım and Nationalist Movement Party (MHP) leader Devlet Bahçeli announced to submit a constitution change to parliament next week to bring in a presidential system.

Following sharp hikes in foreign exchange rates, demands are pouring from several sectors and employees for the government to meet their losses.

The civil servant union Memur- Sen brought up the topic with the Public Personnel Advisory Board while trade unions were voicing the same demand on the eve of the minimum wage negotiations. Contractors were also demanding a decree on price differences due to foreign exchange rate hikes to be issued within a broader scope.

The board met the other day, with the participation of unions, bureaucrats and Labor Minister Mehmet Müezzinoğlu. The topmost demand of the civil servants was the difference in exchange rates. Ali Yalçın, head of Memur-Sen asked the labor minister to make the government act on this matter. A serious change has occurred in civil servant salaries, Yalçın pointed out, saying “Changes in the foreign exchange rates have caused changes in the prices of commodities. The changes in oil prices have directly affected production, especially in our daily lives. There have been negative changes in current financial benefits of public employees, their salaries and fees, and in their purchasing power. For this reason, until the fourth collective contract which is scheduled for August 2017, measures should be taken so that public employees are not negatively affected during this process.”

Minimum wage goes down to $377 Minimum wage talks for 2017, which concerns millions of employees, are scheduled to start on Dec. 6. Confederation of Progressive Trade Unions (DİSK) drew attention before the meeting, that minimum wage which corresponded to $414 at the beginning of 2008 has declined to $377 as of Nov. 2016. “The erosion in foreign exchange rates is also wearing away the minimum wage. The increase in inflation because of the rate hikes will lower minimum wage in real terms,” they said. Confederation of Turkish Trade Unions (Türk-İş), representing workers in the Minimum Wage Determination Commission, is expected to bring out demand that the increase in foreign exchange rates should be taken into consideration.

For contractors, who are facing increased costs due to rate hikes, a first step has been taken recently. In an omnibus bill submitted to parliament, the government is authorized in the payment of the price difference for the pipes used in contracts that have been signed in Turkish Liras before Jan. 1, 2015 by the General Directorate of State Hydraulic Works (DSİ). In the justification of the proposal, the unforeseen increases in pipe prices have been cited. The construction world is expecting the compensation of differences in prices concept should be widened because there have been increases in several more items.